If you live near new construction, you may have noticed something that seems strange. A resale home in your neighborhood has been sitting on the market for weeks — maybe months — while the builder down the street keeps selling homes. You might look at that house and think: What's wrong with it? Sometimes, absolutely nothing. The problem may be that the seller isn't just competing with the other resale homes in the neighborhood. They're competing with the builder. And that changes everything. The Builder May Be the Biggest Competition This is something many homeowners don't realize until they're ready to sell. Builders may be offering buyers incentives such as: Below-market interest rates Closing cost assistance Appliances Design or upgrade incentives HOA incentives Other financing or move-in specials We even had a client purchase a new construction home where the builder paid two years of HOA dues upfront. These offers change frequently and vary by builder, community, home and financing program. But if I'm helping someone sell near active new construction, I want to know what those builders are offering. Because buyers know. And they're comparing those offers to the resale home. Buyers Aren't Always Shopping by Price This is probably the biggest thing I wish more resale homeowners understood. Many buyers aren't shopping based only on the price of the house. They're shopping based on the monthly payment. Here's an example of just how much a builder's lower interest rate can change the comparison. Let's say a buyer is considering a $475,000 resale home at a 7% interest rate. Down the street, a builder has a $550,000 new home and is offering qualified buyers a 4.25% rate. Assuming a 30-year fixed mortgage and 5% down, here's what the principal-and-interest portion of those payments would look like: $475,000 Resale $550,000 New Build Purchase Price $475,000 $550,000 Down Payment (5%) $23,750 $27,500 Loan Amount $451,250 $522,500 Interest Rate 7.00% 4.25% Principal & Interest About $3,002/mo. About $2,570/mo. The new home costs $75,000 MORE, yet its principal-and-interest payment is approximately $432 LESS per month. That's a big deal. A homeowner with a $475,000 resale may look at that $550,000 new build and think: "That's not my competition. Their house costs $75,000 more than mine." But the buyer may be thinking: "I can buy the brand-new house and have a lower monthly principal-and-interest payment." Now we have a completely different sales challenge. These numbers are for illustration and compare principal and interest only. They don't include property taxes, homeowners insurance, mortgage insurance, HOA fees or other costs that affect the total monthly payment. Builder financing incentives also have specific qualifications and can change. Buyers should always get actual payment information from their lender. And Then the Buyer Walks Into the Model Home Now add another layer. Model homes are designed to sell houses. The furniture is beautiful. The finishes are current. The lighting is right. The rooms are staged. Everything is designed to help buyers picture themselves living there. Then that buyer walks into a resale home. If it's cluttered, dark, dated or has obvious deferred maintenance, the difference can feel much larger than it really is. That's why presentation matters even more when we're competing against builders. We aren't trying to make a resale home look brand new. We're trying to make sure it looks like a strong alternative to brand new. But Resale Homes Have Advantages Too New isn't automatically better. A resale home may already have a finished backyard, mature landscaping, window coverings, ceiling fans, appliances, upgraded lighting, storage, a pool or thousands of dollars in improvements that aren't necessarily included in the builder's advertised price. It may have a larger lot. It may be in a finished section of the neighborhood without years of construction around it. It may have a location or homesite the builder can no longer offer. Those things have value. But buyers need to see and understand that value. That's where marketing becomes incredibly important. So Why Is That Resale Home Still Sitting? It isn't always because the price is too high. Sometimes the home wasn't prepared well enough. Sometimes the photos don't compete with what buyers are seeing online from the builder. Sometimes there isn't enough marketing beyond putting the property in the MLS. Sometimes nobody has clearly shown buyers what is already included in the resale home. And sometimes the pricing strategy was based almost entirely on other resale sales without paying enough attention to what a buyer can purchase brand new nearby. Usually, it's not one single thing. It's the entire package. Resale Sellers May Have More Options Than Buyers Realize Builders are very good at advertising their incentives. Resale sellers don't have a giant sign at the entrance to the neighborhood advertising theirs. Depending on the financing and terms negotiated in the transaction, a resale seller may be willing to provide concessions that a buyer could potentially use toward allowable closing costs or an interest-rate buy-down. But many buyers don't even know that may be an option. That's another reason positioning and marketing matter. We can't assume buyers will figure out every advantage of the resale home on their own. I Often Help Sellers When the First Try Didn't Work I regularly talk with homeowners whose first attempt at selling didn't produce the result they expected. Sometimes the listing expired. Sometimes the seller canceled it. Sometimes they're simply trying to figure out what they should do differently before trying again. My first question isn't: "How much should we reduce the price?" It's: "Why didn't the home sell?" Those are two very different conversations. If the home is competing with new construction, I want to understand what buyers were comparing it against. What were nearby builders offering? How did the home present online? Was it clean and ready for buyers? Did the photography help it compete? Was minor staging needed? Did buyers understand the value of the improvements already included with the home? Was there enough online exposure? Did the pricing make sense once builder incentives were taken into consideration? Only then can we build a strategy for bringing the home back to market. Selling Near Builders Means We Can't Cut Corners We are getting resale homes sold in areas with heavy new construction. But these are not the listings where I want to stick a sign in the yard, take a few photos and hope someone eventually comes along. The home needs to look as clean and turnkey as reasonably possible. We use minor staging when it helps. We use professional photography, floor plans and video to help buyers understand the property before they ever get in the car. We pay attention to online placement and how the home's advantages are presented. Because your first showing isn't necessarily happening inside your house anymore. It's happening on someone's couch. That buyer may have your home open in one browser tab and the builder's website open in another. Our marketing needs to give them a reason to click on yours. Before You List — Or Before You List Again If you're thinking about selling a home near new construction, don't just look at what the house next door sold for six months ago. We need to look at what your buyer can purchase today. And if your home was already on the market and didn't sell, don't automatically assume the only solution is a major price reduction. First, let's figure out what happened. I look at the resale competition, nearby builders, current incentives, condition, presentation, pricing and marketing to determine where the property may have lost buyers — and what we can do differently the next time around. Sometimes the home doesn't need a dramatically lower price. It needs a different strategy. Frequently Asked Questions Why are resale homes taking longer to sell near new construction? Builders may be competing for the same buyers with below-market financing, closing cost assistance, warranties, appliances and other incentives. That can make new construction attractive even when its purchase price is higher. Can a more expensive new home actually have a lower monthly payment? Yes. Interest rates can make a significant difference. In our example, a $475,000 resale at 7% had an estimated principal-and-interest payment of about $3,002 per month. A $550,000 new home at 4.25% was approximately $2,570 per month using the same 5% down payment. That's roughly $432 less per month even though the new home costs $75,000 more. Taxes, insurance, mortgage insurance, HOA fees and other costs still need to be considered. Does a resale seller have to lower the price to compete with a builder? Not necessarily. Price is important, but so are condition, presentation, included improvements, lot, location and marketing. I want to understand the entire competitive picture before recommending a pricing strategy. My home was listed before and didn't sell. Does that mean it was overpriced? Not automatically. Pricing could have been a factor, but I also want to look at presentation, photography, marketing, buyer feedback, showing activity and competition from both resale homes and builders. Should nearby builder incentives be considered when pricing my resale home? Absolutely. Buyers are comparing those options whether the resale seller realizes it or not. Knowing what the builders are offering helps us understand the competition we're actually facing. Can Rover Realty help if my home was previously listed with another agent? Yes. I often work with sellers who are preparing to try again. I start by looking at what happened during the previous listing and what has changed in the market. From there, we can build a new strategy around the home's current competition rather than simply repeating the same approach. Rover Realty | Real agents helping real people.